The Arkansas Department of Human Services on Monday stood by its decision to suspend from the state's Medicaid program two businesses entangled in a federal bribery investigation that led to the guilty plea of a former agency deputy director.
In a two-page letter, the Human Services Department denied businessman Ted Suhl's request that the agency reinstate two of his companies, Trinity Behavioral Health Care and Maxus Inc., to the state's Medicaid program.
The agency suspended the companies from being paid for new Medicaid claims earlier this month after former agency Deputy Director Steven Jones pleaded guilty in federal court to accepting bribes in exchange for providing inside information.
In court papers, prosecutors said Jones aided two mental health companies by accepting cash, meals and other things of value from their owner -- a man federal authorities referred to in court papers as "Person C."
After Jones' plea became public, the Human Services Department released a statement saying it had identified Suhl as "Person C." The agency also issued two letters of suspension to the companies, citing Jones' plea as a "credible allegation of fraud."
Suhl has denied any wrongdoing and urged the Human Services Department to allow Medicaid patients to continue being treated by the companies rather than force the beneficiaries to switch to other mental health providers.
Trinity, which is located in Warm Springs, provides inpatient mental health care for about 90 children who are Medicaid beneficiaries. Maxus, which operates statewide under the name Arkansas Counseling Associates, provides outpatient care to more than 2,500 adults and children whose care is paid for by the program.
In the letter issued Monday denying the reconsideration, Tami Harlan, assistant director for Medicaid programs, wrote that she believed the suspensions were warranted based on the allegations made by Jones that he took the bribes in exchange for "official acts" and internal information that benefited the companies.
Harlan, who didn't participate in the original decision to suspend the companies, wrote that she reached her decision after reviewing the information the agency used to make its decision, as well as 100 pages of documents submitted by Suhl's attorney in support of rescinding the suspension.
The two companies can bill Medicaid for services they provide to existing patients through Nov. 5.
The reconsideration request was the first of two challenges to the suspensions filed by Suhl. He has also appealed the decisions to an administrative law judge within the Arkansas Department of Health. A date for the appeal hearing has not been set.
If upheld, the suspensions will last the length of time it takes for prosecutors or the Human Services Department to determine there is insufficient evidence of fraud or until the completion of the legal proceedings regarding the suspected fraud.
In an interview Monday, Michael Scotti, Suhl's attorney, said his client was disappointed that the Human Services Department wouldn't allow patients to continue their treatment while the companies are investigated.
"We're not asking for them to stop investigating the underlying complaints, but in the interim, we thought it would be incredibly reasonable to allow the patients to continue to receive the treatment that they need," Scotti said.
Scotti has argued against the suspension, saying that the Human Services Department didn't show that any Medicaid funds were improperly paid or that patients were affected negatively.
Scotti has said the suspension will cause many patients to regress in their treatment by removing them from the care of medical professionals they trust. He also has said the agency made its decision without considering the "devastating" effects on the companies' patients and employees.
The suspension will likely put the two companies out of business and result in more than 500 employees losing their jobs because the companies rely almost exclusively on Medicaid payments for income, he said.
According to Human Services Department records, Trinity received about $11 million per year in Medicaid payments during the past five years. Maxus received between $12 million and $18 million per year dating back to 2009.
Scotti said the companies have been willing to cooperate with the Human Services Department but would like an agreement that allows both the investigation to continue and the patients to get treatment at the two companies.
"Let's say they investigate Mr. Suhl for a year, and they find these allegations are baseless; they still put the company out of business and all these people had to find new jobs and patients had to find new health care providers," Scotti said.
In an interview Monday, Amy Webb, spokesman for the Human Services Department, said the agency didn't take the decision to suspend lightly, and it has been working to help patients find other providers that meet their needs.
"We absolutely did think about the impact on the patients when we made this decision, but ultimately we think this is the best and most appropriate decision for both the patients and the Medicaid program," Webb said.
Suhl's companies also are under investigation by the state Office of Medicaid Inspector General and the Arkansas attorney general's Medicaid fraud unit.
The investigation into the companies is scheduled to be discussed during a legislative hearing today.
Human Services Department Director John Selig is set to appear before a joint meeting of the House and Senate committees that oversee children and youth to provide an "update on the federal investigation regarding insider information." The committee meeting is at 4 p.m. at the Arlington Hotel in Hot Springs.
Jones, who served as a deputy director of the Human Services Department from 2007 through 2013, pleaded guilty Oct. 2 to charges of conspiracy and bribery concerning programs that receive federal funds.
As part of his plea, Jones admitted to receiving at least $10,000 in cash bribes or other things of value, some of which were funneled through a West Memphis church.
Two other people were involved in the bribery scheme, but federal prosecutors have not named them in court papers. "Person A" has been identified only as a pastor and superintendent of the church. "Person B" has been identified as a former juvenile probation officer and West Memphis city councilman.
Both the FBI and the Office of the U.S. Attorney for the Eastern District of Arkansas have declined to confirm the identities of Person A and Person B. An FBI spokesman has said the investigation that led to Jones is ongoing.
Metro on 10/28/2014